Netflix And Verizon Quietly Reach Connection Deal

Netflix and Verizon confirm to those who call todaythat they have an agreement, but offer no details. Netflix says it hopes the terms “will improve performance for our joint customers over the coming months.” That suggests how much things have changed since February when Netflix cut a similar agreement with Comcast. They initially described the terms in a press release as “mutually beneficial,” but later Netflix decried it as an “arbitrary tax” — and a reason for it to oppose Comcast’s $45B acquisition of Time Warner Cable. Netflix CEO Reed Hastings told analysts last week that “we don’t think we should have to” pay for a superior connection to an Internet service provider. “It started off with a very small fee and then escalated into this blackout type model that has been a real problem for the industry and for consumers. So we are trying to avoid that by seeing if we can move everyone to no-fee interconnect.” Netflix says that in March Verizon FiOS speeds averaged 1.91 Mbps, down from 1.1 Mbps in November.